Trump’s pharma tariffs: In a dramatic development, the US President Donald Trump announced 100% conditional tariffs on the pharma imports from 1st October 2025. The US President made this announcement on Thursday from his social media handle, which triggered panic selling on Friday in the pharma segment. Indian Pharma majors, especially Sun Pharma, Aurobindo Pharma, Cipla, Dr Reddy’s Lab, Gland Pharma, Zydus Life and Lupin, account for around 70% of the drugs exported to the US. However, stock market experts believe that Indian pharma companies may see a sharp turnaround on Monday as they are expected to escape the latest Trump tariff shock. They said that a 100% tariff on pharma imports is conditional, as it will be levied on the patent and branded drugs, whereas the Indian companies are mainly in the generic drug exports to the US.

Why Indian pharma may escape Trump’s tariff shock?

Expecting a negligible impact on the Indian pharma companies from Trump’s pharma tariffs, Tushar Manudhane, Senior Vice President, Institutional Research Analyst – Healthcare at Motilal Oswal, said, “Given the duties announced are on branded/patented drugs, there would be no impact on the generics exports done by Indian pharma companies. The major portion of exports to the US is generic medicine. So we believe it is business as usual for generic pharma companies. Even concerning CDMO companies, they make part of the product, not the formulation for Innovator/global pharma companies. Also, CDMO companies cater to the global requirements of innovator pharma companies and not just the US market.”

The Motilal Oswal expert added that the raw material of innovator companies is about 4-5% of sales. Given that changing the raw material source is a long-drawn exercise with multiple hurdles comprising capability, capacity, and compliance, the innovator can either absorb the cost or pass it on to the customer. The innovator has a limited patent exclusivity period and would like to use this time to maximise sales. We still await the executive order for a detailed understanding of the tariff on drugs.

Echoing Tushar Manudhane’s views, Avinash Gorakshkar, an SEBI-registered fundamental research analyst, said, “India mainly exports generic drugs to the US, and around 3% of the net drug export from India to the US would fall under this conditional Trump’s pharma tariffs.”

Pharma stocks to be in focus on Monday

On stocks that may come under the bulls’ radar on Monday, Avinash Gorakshkar said, “Zydus Life, Aurobindo Pharma, Dr Reddy’s Lab, Lupin, Sun Pharma, Cipla, and Gland Pharma constitute around 70% of the total exports to the US. These Indian pharma stocks witnessed heavy beating during Friday’s deals. After clarifying the conditional Trump’s pharma tariffs, we expect a sharp rebound in these Indian pharma majors.”

The US accounted for 34.60% of India’s total drug exports in FY25. However, India’s pharma exports to the US dropped from $745 million in May 2025 to $646.60 million in August 2025. Experts see this dip mainly due to the rising trade war and the delay in the India-US trade deal.

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